Question 1

Which of the following statements is correct?

Accepted Answer

A)   The U.S. federal government collected a higher percentage of income in taxes in the early 1900s than in the early 2000s.
B)   The U.S. federal government collects a higher percentage of income in taxes than many European countries, including France and Germany.
C)   The U.S. federal government collects a lower percentage of income in taxes than many developing countries, including Mexico and India.
D)   The U.S. federal government collects a similar percentage of income in taxes as Brazil and Japan.E) A) and C)
F) None of the above

Question 2

Which of the following are taxed?

Accepted Answer

A)   both corporate profits and dividends shareholders receive
B)   corporate profits but not dividends shareholders receive
C)   dividends shareholders receive but not corporate profits
D)   neither corporate profits nor dividends shareholders receiveE) C) and D)
F) A) and B)

Question 3

Scenario 12-2
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-2.Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9.Which of the following statements is correct?

Accepted Answer

A)   Roger will bear the full burden of the deadweight loss.
B)   Regina will bear the full burden of the deadweight loss.
C)   Both Regina and Roger will share the burden of the deadweight loss.
D)   There will be no deadweight loss.E) A) and D)
F) A) and B)

Question 4

Which of the following tax systems could not be structured to satisfy conditions of vertical equity?

Accepted Answer

A)   a proportional tax
B)   a regressive tax
C)   a progressive tax
D)   a lump-sum taxE) A) and C)
F) A) and D)

Question 5

Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

Accepted Answer

A)   a progressive tax system
B)   a regressive tax system
C)   a consumption tax
D)   a lump-sum taxE) A) and B)
F) None of the above

Question 6

Approximately what percentage of the U.S.federal government's receipts come from individual income taxes?

Accepted Answer

A)   8%
B)   15%
C)   43%
D)   67%E) A) and B)
F) A) and C)

Question 7

The government's health plan for the elderly is called

Accepted Answer

A)   Medicaid.
B)   Medicare.
C)   Social Security.
D)   TANF.E) None of the above
F) B) and C)

Question 8

Many people consider lump-sum taxes to be unfair to low-income taxpayers.

Accepted Answer

A) True 
 B)False

Question 9

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) two people with the same total income would pay taxes of the same amount,and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person.Which of the following tax systems could achieve both goals?

Accepted Answer

A)   a lump-sum tax
B)   a regressive tax
C)   a progressive tax
D)   a proportional taxE) C) and D)
F) A) and D)

Question 10

Corporate profits are

Accepted Answer

A)   included in payroll taxes.
B)   exempt from taxes.
C)   taxed twice, once as profit and once as dividends.
D)   taxed to pay for Medicare.E) A) and D)
F) All of the above

Question 11

A tax that is higher for men than for women violates the criterion of

Accepted Answer

A)   horizontal equity.
B)   vertical equity.
C)   the ability-to-pay principle.
D)   the marriage tax.E) A) and C)
F) C) and D)

Question 12

When compared to nonpoor countries,poor countries usually have

Accepted Answer

A)   very high tax burdens.
B)   similar tax burdens.
C)   relatively low tax burdens.
D)   no taxes because of high poverty levels.E) A) and C)
F) B) and D)

Question 13

Suppose that the government collected taxes in the following fashion: people who earn less than $50,000 pay 25 percent in taxes,people who earn between $50,000 and $100,000 pay 35 percent in taxes,people who earn between $100,000 and $200,000 pay 30 percent in taxes,and people who earn more than $200,000 pay 28 percent in taxes.Which of the following statements is correct?

Accepted Answer

A)   The tax system is proportional for income levels less than $50,000 and regressive for income levels above $50,000.
B)   The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000.
C)   The tax system is progressive for income levels less than $100,000 and regressive for income levels above $100,000.
D)   The tax system is progressive for income levels less than $50,000 and proportional for income levels above $100,000.E) A) and D)
F) B) and C)

Question 14

When interest income from savings is taxed,

Accepted Answer

A)   people will save more to make up for what is lost in taxes.
B)   people will save the same amount as they would have without the tax.
C)   people will save less than they would without the tax.
D)   None of the above is correct since the government would not tax interest on savings.E) A) and B)
F) A) and C)

Question 15

In 2009,which category represented the largest source of receipts for the U.S.federal government?

Accepted Answer

A)   Medicare
B)   Social Security
C)   corporate income taxes
D)   individual income taxesE) C) and D)
F) A) and D)

Question 16

In 2009,approximately how much of federal government spending went to Social Security?

Accepted Answer

A)   9%
B)   19%
C)   29%
D)   39%E) A) and D)
F) All of the above

Question 17

In 1789 the percentage of the average American's income that went to pay taxes was about

Accepted Answer

A)   5%. Today it is about 33%.
B)   5%. Today it is about 50%.
C)   33%. Today it is about 33%.
D)   33%. Today it is about 50%.E) None of the above
F) All of the above

Question 18

In 2009,what percentage of federal government receipts came from corporate income taxes?

Accepted Answer

A)   7%
B)   15%
C)   25%
D)   42%E) A) and C)
F) C) and D)

Question 19

A tax system exhibits vertical equity when taxpayers with similar abilities to pay contribute the same amount.

Accepted Answer

A) True 
 B)False

Question 20

Of the following countries,which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Accepted Answer

A)   France
B)   United States
C)   Canada
D)   SwedenE) All of the above
F) B) and D)

Exam 12: The Design of the Tax System.

Which of the following statements is correct?

Correct Answer
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When compared to nonpoor countries,poor countries usually have

Correct Answer
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The government's health plan for the elderly is called

Correct Answer
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Which of the following are taxed?

Correct Answer
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Correct Answer
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In 2009,what percentage of federal government receipts came from corporate income taxes?

Correct Answer
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Of the following countries,which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Correct Answer
verified

A tax that is higher for men than for women violates the criterion of

Correct Answer
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In 1789 the percentage of the average American's income that went to pay taxes was about

Correct Answer
verified

Corporate profits are

Correct Answer
verified

Correct Answer
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In 2009,approximately how much of federal government spending went to Social Security?

Correct Answer
verified

A tax system exhibits vertical equity when taxpayers with similar abilities to pay contribute the same amount.

Correct Answer
verified

Approximately what percentage of the U.S.federal government's receipts come from individual income taxes?

Correct Answer
verified

Correct Answer
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Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

Correct Answer
verified

Which of the following tax systems could not be structured to satisfy conditions of vertical equity?

Correct Answer
verified

In 2009,which category represented the largest source of receipts for the U.S.federal government?

Correct Answer
verified

Many people consider lump-sum taxes to be unfair to low-income taxpayers.

Correct Answer
verified

When interest income from savings is taxed,

Correct Answer
verified

Exam 12: The Design of the Tax System.

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

When compared to nonpoor countries,poor countries usually have

Correct AnswerverifiedShow Answer

The government's health plan for the elderly is called

Correct AnswerverifiedShow Answer

Which of the following are taxed?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2009,what percentage of federal government receipts came from corporate income taxes?

Correct AnswerverifiedShow Answer

Of the following countries,which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Correct AnswerverifiedShow Answer

A tax that is higher for men than for women violates the criterion of

Correct AnswerverifiedShow Answer

In 1789 the percentage of the average American's income that went to pay taxes was about

Correct AnswerverifiedShow Answer

Corporate profits are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2009,approximately how much of federal government spending went to Social Security?

Correct AnswerverifiedShow Answer

A tax system exhibits vertical equity when taxpayers with similar abilities to pay contribute the same amount.

Correct AnswerverifiedShow Answer

Approximately what percentage of the U.S.federal government's receipts come from individual income taxes?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

Correct AnswerverifiedShow Answer

Which of the following tax systems could not be structured to satisfy conditions of vertical equity?

Correct AnswerverifiedShow Answer

In 2009,which category represented the largest source of receipts for the U.S.federal government?

Correct AnswerverifiedShow Answer

Many people consider lump-sum taxes to be unfair to low-income taxpayers.

Correct AnswerverifiedShow Answer

When interest income from savings is taxed,

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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